No respite for Zee promoters: Recent investor ire seen forward, says report


Zee Leisure final week witnessed shareholder activism that noticed an open name for the ouster of promoters and the incumbent administration led by Punit Goenka. Moreover, Dish TV additionally confronted the same name earlier this month.

The difficulty at Zee Leisure might be gauged from the truth that this can be a distinctive firm whereby the promoters personal simply 3.99 per cent, however totally management the agency. The Zee Group didn’t return calls searching for remark.

Firm insiders say buyers need the promoters to exit each Zee Study and Zee Media Company, although the Subhash Chandra-run Essel Group is the only largest shareholder of each not like in Zee the place they personal simply 3.99 per cent.

As of the June quarter, the promoters maintain 21.69 per cent of Zee Study and 14.72 per cent in Zee Media Company, previously generally known as Zee Information. Promoters and their pleasant investor fraternity collectively maintain 40.68 per cent in Zee Study and 43.99 per cent in Zee Media Company.

The promoters/promoter teams of Zee Study collectively holding 21.69 per cent they usually embrace Essel Holdings (8.85 per cent), Asian Satellite tv for pc Broadcast (6.99 per cent), and others like Jayneer Infrapower, Essel Media Ventures, Jayneer Enterprises and Sprit Infrapower.

Its overseas shareholders are Moon Capital Buying and selling (6.43 per cent), Polus International Fund (6.13 per cent), Morgan Stanley Asia (2.85 per cent), Copthall Mauritius Funding (2.33 per cent), and UBS Principal Capital Asia (1.4 per cent), totalling 19.94 per cent. With IndusInd Financial institution proudly owning 5.33 per cent, HDFC 4.85 per cent and Rattanindia Finance 6.42 per cent, Zee Study’s institutional holding stood at 58.37 per cent.

Within the case of Zee Media Company, the promoters personal 14.72 per cent, whereas its overseas portfolio buyers embrace Acacia Companions (2.6 per cent), Acacia Conservation Fund (2.25 per cent), Acacia Institutional Companions (1.99 per cent), India Alternatives Progress Fund (1.35 per cent), totalling 12.21 per cent and non-institutions personal 73.03 per cent.

The transfer for brand spanking new administration at Zee Study is being pushed by the New York-based hedge fund Moon Capital Administration, which is the only largest overseas shareholder within the agency with a 6.43 per cent stake since 2015.

The fund had in February 2020 requested Chandra to go away Zee Study, citing piling debt, company governance lapses and an absence of a transparent development technique and needed Shayon Chatterjee, one in every of its managing administrators, to be appointed as an impartial director. Zee Study is a number one training agency with a big chain of KG to class XII colleges underneath Mount Litera Zee Faculty (over 120 colleges throughout 110 cities) and likewise runs Asia’s largest pre-school chain (over 1,900 colleges throughout 750 cities throughout India and neighbouring international locations) Kidzee since 2003.

The opposite group firm that’s going through investor ire is Zee Media Company, previously Zee Information – one of many largest information networks with 14 channels in six languages, reaching 365 million viewers and digital properties like zeenews.com and dnaindia.com. Additionally it is accused of missing company governance and plenty of different administration points.

What’s ironic is that related company governance points have prevailed in each the businesses owned by the Essel Group, the market sources mentioned. Traders imagine that Chandra’s exit will permit Zee Study to construct an environment friendly administration workforce and transparently interact with the potential bidders believed to have an interest within the firm, they added.

It may be famous that not too long ago, Zee Leisure and Dish TV’s buyers requested two impartial administrators to resign as a consequence of company governance lapses. Following this and only a day forward of the AGM final week, two reappointed administrators — Manish Chokhani and Ashok Kurien resigned. It’s evident that the identical calls for will come to hang-out Zee Media Company and Zee Study, worry the promoters now, the sources mentioned.

The issue with Dish TV — the main direct to residence tv distributor, started when Sure Financial institution, which has an publicity of over 6,500 crore to the Chandra group and thus the only largest shareholder — referred to as for his ouster.

The financial institution, which itself was a sufferer of its promoter Rana Kapoor’s caprice and corruption, has alleged the board isn’t appearing according to good company governance requirements and that solely with a brand new proprietor on the helm may help it get well the majority of the 6,500 crore borrowed by Chandra.

Proxy advisory agency Ingovern had additionally raised concern over the position of the audit committee headed by Punit Goenka, MD and CEO of Zee Leisure after its massive buyers — Invesco Growing Markets Fund and OFI International China Fund — had referred to as his elimination. Goenka was appointed a member of the audit committee from March 17, 2021, changing Kurien and Chokhani.

“It’s unusual that the board allowed such induction of a promoter govt director into the audit committee,” mentioned Ingovern in a be aware on September 14.

Such points are not new to company India as the primary rip-off that got here out was Satyam Computer systems in January 2009, when after admitting to cooking the books its founder-chairman Ramalinga Raju stop.

The federal government outmoded the board and appointed Deepak Parekh because the chairman earlier than being offered off to Tech Mahindra. The second such rip-off was in Fortis Healthcare in 2018, resulting in new administration.

However the largest company fraud was within the IL&FS rip-off, which owed greater than 95,000 crore to banks when it went stomach up in September 2018, resulting in the federal government superseding its board underneath the management of Uday Kotak. The most recent company scams embrace the PMC Financial institution and DHFL in 2019, and Sure Financial institution and Lakshmi Vilas Financial institution in 2020. 

This story has been printed from a wire company feed with out modifications to the textual content. Solely the headline has been modified.

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